What are cryptocurrencies? All the questions and answers you need
Summary:
What are cryptocurrencies? All you need to know about cryptocurrencies: how they were born, what they are, how they work and what cryptocurrencies are for.
In this article we help you understand what cryptocurrencies are, how cryptocurrencies work and how to buy them.
Cryptocurrencies what they are and how to buy them explained in simple words
Before starting to invest in the world of digital currencies, it is important to know what cryptocurrencies are , and how crypto currencies work (they can also be called that).
Cryptocurrencies are a form of digital money and are one of the most important innovations in the technological and financial world in recent years.
Every day there are more and more possibilities to use cryptocurrencies ( cryptocurrency in English) as a real useful currency to buy services and goods and to be easily received and sent to other people.
The revolution is in the fact that it is the first currency not tied to the issuance and control by a central bank.
Also, if you are thinking that other traditional systems also allow you to do operations with money, well, then think that these companies, organizations or banks, keep your money and they are the ones to carry out the operations you ask them.
In the case of cryptocurrencies, however, you are your bank .
Without the need for intermediaries, a quantity of tokens chosen by you can be moved directly from you to other people and / or services.
What is a cryptocurrency: why is it called that
To answer the question what a cryptocurrency is we must start from the origin of the name:
the name cryptocurrency , in fact, derives from the contraction of the two words crypto spelling and currency .
Encryption is the use of advanced mathematical algorithms to protect your funds from any external attack, so that no one but you can use your crypto.
All exchanges and wallets apply encryption to ensure security for their users, you don't have to worry about it.
Main features of cryptocurrencies
Digital coins have two specific characteristics:
- they have no form of cash
- they are not issued by governments or institutions
Cryptocurrencies are based on blockchain technology which guarantees an unassailable protection system for these digital currencies , hence the name "Crypto" "Currencies".
Blockchain explanation
Blockchain technology allows cryptocurrencies to function as a digital medium of exchange, without having to use cash or bank transfers. If you want to learn more, we recommend reading the Consob article “Cryptocurrencies” .
Cryptocurrencies can be stored, sold or bought through a crypto wallet .
Types of cryptocurrencies
There are currently thousands of cryptocurrencies and new ones appear every day, not to mention that some countries are even ready to issue their own national virtual currencies.
To simplify, we can divide them into two categories:
👉Cryptocurrencies supported by their own blockchains, such as Ethereum (ETH) and Bitcoin (BTC)
👉Cryptocurrencies built on existing blockchains and also known as tokens (for example: Ox and Jibrel Network Token-JNT).
Investing in cryptocurrencies: where you can buy them
Now that you understand better what cryptocurrencies are, you may be wondering where you can buy them.
Buying cryptocurrencies is not difficult.
There are various exchanges on which it is possible to do this through traditional payment instruments such as credit cards and bank transfers.
On these platforms, often very simple to use, it is also possible to sell cryptocurrency to convert it into euros or dollars and credit it to your current accounts, PayPal accounts or credit cards.
Among the most famous and used Exchange platforms we can certainly recommend Coinbase based in San Francisco, which since 2012 allows you to buy, sell, transfer and store cryptocurrencies.
Over the years Coinbase has added many crypto currencies in addition to Bitcoin to its platform , such as Ehereum, Chainlink, Litecoin, Bitcoin Cash, EOS and many others.
Coinbase is the platform on which BTCSentinel.com relies to have the updated prices of the cryptocurrencies on the basis of which it processes its charts.
More and more people all over the world, including United States, trading and non-trading experts, who do trading activities on crypto based on the volatility (also called instability) of the price of the same, a price that can undergo significant changes in value in percentage terms within a few hours, both upwards and downwards.
In this regard, you may also be interested in reading the article that we have dedicated to the value of cryptocurrencies, on what the evaluation of a cryptocurrency is based and on what its volatility depends.
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